28.12.09 Town Hall Cash Scam

TOWN Hall officials have admitted they do not know who stole nearly half a million pounds of taxpayers’ money after the man accused of the scam was cleared by a jury.

Earlier, the jury heard details about the chaotic way Camden Council’s business support and financial systems development department was run, with Mr Hussain’s defence barrister John Causer describing it as “crying out to be defrauded”.

Yesterday (Wednesday) the council refused to answer questions about what went wrong with their investigation and why their auditing team put together a case against the wrong man, instead directing the New Journal to police. Police sources ­suggested it was unlikely that a new investigation would be launched.

The missing cash left a massive hole in the council’s finances. Around £200,000 was stopped before it entered the bogus account and a further £200,000 was covered by Camden’s insurers. But the taxpayer still ended up footing a £10,000 bill in insurance excess charges.

After cross-examining department boss Sue Creech, he said: “On Tuesday she said the whole system was safe, but quickly conceded the whole place was run vastly differently to this. They’ve got invoices a year out of date. [It’s] a department where no one has any clear idea of who works for them [and] even the records are ­inaccurate.”

Earlier Ms Creech had admitted her department was often left chasing invoices from various other departments but was legally obliged to pay out without hard copies.

“There was a good chance we would have difficulty getting the paperwork and we cannot hold up payments,” she said, before describing the problem as “an area we’ve always struggled with.”

Mr Hussain had described how it was not unusual to chase after hard copies of invoices more than a year after the money had been paid out and that he was told to throw away any incomplete paperwork more than 12 months out of date.

Prosecution barrister Benedict Kelleher suggested the department was not watertight. “It wasn’t a foolproof ­system,” he told the court, “and in this case it was quite easily defeated”.

Lib Dem finance chief Councillor Ralph Scott could not be reached last night as the New Journal made several attempts to telephone him.

A council press officer said: “The misappropriation of public funds is a very serious matter and the council has been successful in getting back all but £10,000 of the monies that were stolen.”

He added: “This incident took place 15 months ago and, since then, changes to procedures and processes have been made within the section where it took place to ensure that our internal controls are as robust as possible.”